Women Are Investors: How To Shift Your Mindset

A 2024 survey from Investopedia and REAL SIMPLE found that 57% of women don’t hold any investments. Some who said they have retirement accounts don’t consider themselves to be investors. The two most common reasons women say they’re not investing are that they don’t know how to start or they don’t have enough money.

This data shows a need to reinforce two points: Women are investors and you don’t need hundreds or even thousands of extra dollars to get started. Shifting your mindset about investing can be the hardest part of starting your journey but it can pay off. 

Key Takeaways

• Experts say that shifting your mindset around investing can be the hardest part of getting started.
• Some things like fear, lack of knowledge, and lack of transparent peer-to-peer conversations hold women back from investing.
• Even investing a small amount of money now can be more valuable than investing a large amount of money years from now because of the power of compound interest.
• According to a Fidelity Women and Investing Study, women outperform their male counterparts in their investment portfolios by 40 basis points.

How Women Feel About Investing

Women have mixed feelings and participation rates when it comes to investing. The 2024 Her Money Mindset survey found that just 43% of respondents said they’re invested. Only 7% of women confidently said they know the most about investing compared to other financial topics.

The survey showcased the power and confidence that can be found in investing. Of the women who are invested, 61% said they’re proud of an investing decision they made. Here’s what some of the women-identifying survey respondents anonymously said when asked what financial decision or action they are most proud of.

• “Becoming more financially literate and learning about investing in something that can be used as a separate source of income. I have slowly but surely been investing in stocks and crypto when I have extra money.” Millennial, single, annual household income of less than $75,000.
• “I am most proud of myself for investing part of my savings into the stock market and learning about the everyday trends within the market.” Generation X, married or living with a partner, annual household income over $75,000.
• “Deciding right out of college to join my company’s 401k. If I didn’t do that, I would not be financially secure now.” Baby boomer, married or living with a partner, annual household income over $75,000.

These insights paired with data that shows that women are starting to invest at a higher rate than men are moves in the right direction. A lack of communication, knowledge gaps, and fear are still holding women back, however.

Changing the Mindset

Perhaps one of the most important ways to increase women’s awareness and participation in investing is talking about it but that’s not happening much.

The Her Money Mindset survey found that women get most of their financial information from the internet and family and friends. Seventy percent of women said they talk to their friends about money but only 34% of those talk about investing.

“As women, it is crucial for us to talk more about money and investing,” said Valerie Leonard, CEO and financial advisor at EverThrive Financial Group. “We must have empowering conversations with one another that will help bridge the gender gap and encourage our friends and the next generation to get smarter with money.”

It can be hard to trust what you don’t understand, too. A lack of information is the No. 1 reason women said they’re not investing.

Stephanie McCullough, founder and financial planner at Sofia Financial and host of the Take Back Retirement podcast, sees this often in her investment practice. She regularly tells women, “You don’t have to have all the answers. You just need to know what questions to ask and have the guts to ask them.” 

Note

The Her Money Mindset Survey found that investing is the No. 2 financial topic they want to learn more about, behind saving money.

The Truth: Women Are Investors—And Good Ones

Women outperformed their male counterparts in their investment portfolios by 40 basis points or 0.4 of a percentage point, according to a Fidelity Women and Investing Study.

The 2024 Her Money Mindset Survey reinforced that women who are investing are engaged with their portfolios and market happenings. This engagement may help drive portfolio performance.

Note

Thirty-one percent of invested women said they check the performance of their investments at least monthly and 29% check the performance of the stock market at least monthly, according to the 2024 Her Money Mindset Survey.

The research women are doing may be boosting confidence in their investing, too. One woman surveyed by Investopedia and Real Simple said that she focuses on “choosing to invest in stocks that pay dividends rather than focusing solely on performance and trends.” Another said her best investment strategy is “purchasing high-quality company stocks and holding them for the long term.”

Advice From Women, For Women

Our experts haven’t been shy about offering some advice. They focus on some key points.

Start now

Stephanie Tisdale, an avid investor and owner of Breakthrough Bookkeeping, said that learning to invest “was like drinking from a firehose.” There was so much information that she had a hard time distilling what was most important to her and her circumstances. This led to inaction for longer than she would have liked. She quickly realized the impact investing makes on reducing the distance between where she began at age 35 and where she wants to be.

Leonard said women’s desire to invest is usually tied to their goals. Women aren’t jumping into investing simply for the love of the game. She finds that they’re motivated to invest because they want to put kids through college, buy a new home, or save for retirement.

Time is your best friend when it comes to investing. The sooner you start, the more time you have to benefit from compound interest. Identify a goal you’re passionate about and invest with that goal and timeline in mind.

Money isn’t shameful

McCullough specializes in working with women investors and supporting them in meeting their financial goals. She finds that a lot of women self-describe as “a mess” because of societal stereotypes about overspending and being “bad” with money. Many of McCullough’s clients have never been taught about money and they take on the stereotypes as truth about themselves even when they’re not true. And most of the time, they’re not.

McCullough wants women to know that it’s not a character flaw and the shame spiral won’t get you any closer to meeting your goals even if it’s true that you’re not “good” with money now.

Consider what you can gain

McCullough frequently sees women enter the market “when the pain of staying where you are is greater than the pain of change.” Many tell her that they can’t believe they waited as long as they did, however, when they take the plunge into investing.

Important

Research by Fidelity confirmed that seven out of 10 women wished they would have started investing sooner.

Start small

One of the biggest reasons women say they’re not investing is that they don’t think they have enough money left over at the end of the month, according to the 2024 Her Money Mindset Survey. It’s a huge misconception that you have to have a lot of money to invest.

A great place to start is participating in an employer-sponsored plan like a 401(k) especially if your employer is offering a contribution match. You can also put a few dollars a month into a target-date ETF and let dollar-cost averaging and compounding interest work for you.  

McCullough said she wants to remind all women, “You can start long before you feel you know everything.”

Make a Plan

The first thing you should do to get started in investing is figure out why you want to save. The journey of investing should always start with goals and a timeframe. Are you planning to buy a house in five years? How much money will you need to make a necessary down payment? 

You can build a roadmap with investment products to get you there when you’ve answered these questions.

Look into individual retirement accounts, both Roth and traditional, and find out if your employer offers a 401(k) plan and matches contributions if you’re prioritizing retirement savings. Look into 529 Plans and Coverdell accounts if you’re hoping to save for education expenses. Look into mutual or index funds if you’re saving for long-term goals like building a dream home in 10+ years.

And, of course, you can always contact a financial advisor in your area of interest. You can find someone to guide you on your wealth-building journey if you have even $50 a month to invest.

Do I Have to Have a Lot of Money to Start Investing?

You don’t have to have a lot of money to start investing. Even small amounts can grow significantly with the power of compounding interest.  A small amount invested early can be worth more than a greater amount invested later. 

What Is the First Thing I Should Do to Start Investing?

First, consider your goals and timeline. They’ll determine the best products for you to use. Long-term goals will allow you to take more risks with products like stocks. Shorter-term goals can best be achieved with safer options that offer less growth potential. 

How Do I Build Wealth As a Single Woman?

You should first participate in employer-sponsored retirement plans up to the matching amount if you are eligible. Focus on paying down any high-interest debt and saving for emergencies then prioritize investing for long-term goals.

The Bottom Line

Investing can be intimidating for many women but they can be capable and conscientious investors when they take the first step and get started. Education is key to overcoming the hesitations that keep women out of the investment markets whether it be with self-directed research, conversations with seasoned investment professionals, or even conversations with friends.   

Remember, women are investors. 

Disclosure: Investopedia does not provide investment advice. Investors should consider their risk tolerance and investment objectives before making investment decisions.